In today’s briefing:
- Kenvue (KVUE US) Pre-IPO: Marquee Brands to Drive Profitable Growth
- ASRT: Rolling with Spectrum
- EQT/Dechra Pharmaceuticals: Generous Possible Offer
- Baxter International Inc.: Surviving A Supply Chain Nightmare – Key Drivers
- Inmed Pharmaceuticals, Inc. – A Unique Developer of Rare Cannabinoid-Based Therapies
- Teleflex Incorporated: Revolutionizing Gastric Sleeve Surgery with the Titan Stapler – Key Drivers
Kenvue (KVUE US) Pre-IPO: Marquee Brands to Drive Profitable Growth
- Kenvue (KVUE US), a wholly owned subsidiary of Johnson & Johnson (JNJ US), is preparing for an IPO of 151M shares. The IPO price is expected to be $20–23/share.
- Goldman Sachs, J.P. Morgan, and BofA Securities are acting as joint lead bookrunning managers for the IPO. J&J will still own more than 90% of Kenvue’s shares after the IPO.
- In 1Q23, Kenvue’s revenue increased 7% YoY to $3.9B, driven by a 12% YoY revenue growth in self-care OTC products. Adjusted net income increased 3% YoY to $630M.
ASRT: Rolling with Spectrum
- ASRT is purchasing Spectrum Pharmaceuticals (SPPI) in an all-stock transaction that adds ROLVEDON to its product portfolio.
- The initial reaction to the deal has been materially negative after ASRT added it would maintain a majority of SPPI’s operating expenses.
- ASRT’s management has been looking for an asset that would help diversify the revenue stream away from Indocin. The purchase of SPPI achieves such a goal
EQT/Dechra Pharmaceuticals: Generous Possible Offer
- Dechra is in discussions with EQT and ADIA about a 4,070 cash possible offer (46.6% premium, 22.6x EV/NTM Fwd EBITDA and 32x Fwd P/E). PUSU deadline is 11 May.
- With the deal multiple at a slight premium (on both EV/Fwd EBITDA and Fwd P/E) over Zoetis, the market leader in animal health, the offer appears to be reasonably priced.
- My base case fair value estimate is 3,568p/share (DCF-based), 12.3% below the offer price. My TP is thus 4,070p. Gross spread is 9.1%, therefore I feel the risk/reward is balanced.
Baxter International Inc.: Surviving A Supply Chain Nightmare – Key Drivers
- Baxter International’s fourth quarter performance fell short of the expectations of its management as well as Wall Street.
- Foreign exchange losses and the product mix throughout the quarter were the primary reasons for a rather disappointing result.
- Sales during the fourth quarter were $3.9 billion, increasing 2% operationally, 17% at constant currency, and 11% reported-on-basis.
Inmed Pharmaceuticals, Inc. – A Unique Developer of Rare Cannabinoid-Based Therapies
- InMed is a unique clinical-stage biopharmaceutical company that is engaged in the research and development (R&D) of rare non-psychoactive cannabinoids for therapeutic use.
- The company is stewarded by a strong leadership team led by CEO Eric A. Adams
- InMed’s growing development pipeline is at the forefront of pharmaceutical companies that are harnessing rare cannabinoids for treating a range of disorders with unmet medical needs.
Teleflex Incorporated: Revolutionizing Gastric Sleeve Surgery with the Titan Stapler – Key Drivers
- Teleflex had a mixed quarter with revenues of $758 million that was below Wall Street expectations given a year-over-year fall of 0.5%.
- Despite an unanticipated subcomponent supply chain issue in their Surgical business, their fourth quarter constant currency revenue growth remained steady.
- Teleflex’s Interventional, Surgical, and OEM product categories produced double-digit constant currency year-over-year revenue increase.
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